Stock market investing is an excellent way to use your money for meaningful wealth growth in the long run. Rather than focusing on rapid, short-term gains, many might argue that investing for the long term is a more reasonable way to grow your wealth. That is the approach Warren Buffett has used over the decades to be where he is now.
If you seek long-term holdings like the Oracle of Omaha, you can examine his investment portfolio at Berkshire Hathaway for inspiration. Buffett’s portfolio has historically outperformed the broader market, with holdings comprising of assets chosen for long-term potential. For many, buying and holding a stock owned by Berkshire for years means aligning with a solid long-term investment strategy.
To this end, here’s a quick overview of three Warren Buffett stocks that you can consider for your self-directed portfolio as well.
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Apple
Apple (NASDAQ: AAPL) is the largest holding in Berkshire Hathaway’s portfolio, accounting for around half of its holdings. The US2.66 trillion market capitalization company is best known for its iPhones. Granted, its best days might be far behind in terms of providing rapid growth. Still, the stock can be a solid holding for any long-term portfolio.
Besides iPhones, the company has several offerings that generate a significant portion of its revenues. Its apps and digital content have become the second-largest revenue producers for Apple. Apple’s operating profit margins account for 70% of its services revenue, and this segment is consistently growing.
With more innovations like the Apple Vision Pro, an increased integration of artificial intelligence technology, and much more, Apple has plenty going for it to continue growing shareholder value for years to come.
Coca-Cola
Coca-Cola (NYSE: KO) is another Berkshire Hathaway mainstay. The US$258.23 billion market capitalization company is a household name worldwide. Coca-Cola is not a rapidly growing tech company. It is a simpler investment to consider for your self-directed portfolio. Coca-Cola is a cash-generating investment that is as safe as it can get.
Coca-Cola stock generates substantial cash flows due to the never-ending demand for its products. The cash flow translates to long-term capital growth and reliable dividend payouts. Not only does Coca-Cola stock pay dividends regularly, but the Dividend King has raised its payouts for the last 62 consecutive years.
As Berkshire’s fourth-largest holding, Coca-Cola stock can easily be a safe long-term investment to consider for your self-directed portfolio.
American Express
American Express (NYSE: AXP) is one of the most well-known credit card companies worldwide. The US$158.14 billion market capitalization giant differs from its credit card peers. Its business model might be better described as the management of reward programs and perks that happen to be related to credit cards.
People pay hundreds of dollars every year to use an American Express card due to all the perks they receive from bonus hotel-stay times to credit toward air travel tickets, cash back on groceries, and much more. Other credit card companies also offer perks and reward programs. However, none can even come close to rivalling American Express in that regard.
Between its fee-based revenue, interest income, and a fraction of each transaction its cards facilitate, it is a reliable cash cow for any investment portfolio. As the third-largest holding in Berkshire’s portfolio, it might warrant a place in your self-directed portfolio as well.
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Foolish takeaway
While the three NASDAQ stocks might not deliver multi-fold returns right now, they all offer a way to safely grow your wealth in the long run. Well-capitalized, with well-run underlying businesses and substantial long-term growth potential, these three Warren Buffett stocks can be excellent investments to buy and hold for decades.
